WASHINGTON - With the freeze on student loan payments set to expire soon and pressure from Democrats to provide broader relief, President Joe Biden is prepared to deliver on his campaign promise to provide up to $10,000 in debt cancellation.Details of the plan have been kept closely guarded by the White House, but borrowers who earn less than $125,000 a year would be eligible for the loan forgiveness, according to the Associated Press, citing three people familiar with the decision.Biden is also set to extend a pause on federal student loan payments through January, the AP reported.
More than 43 million Americans owe a combined $1.6 trillion in student debt held by the federal government, according to data from the Education Department.
That includes more than 7 million borrowers who have defaulted on student loans, meaning they are at least 270 days late on payments.With inflation at its hottest level in four decades, a shrinking U.S.
economy, and climbing interest rates, repaying student loans could become even more challenging for borrowers. Biden’s student loan forgiveness plan is likely to face legal challenges, and if it survives, the plan could offer some welcome relief to a swath of the nation in the run-up to this fall's midterm elections.